Know your Own Worth – Don’t take Price Objections at Face Value.

Those dreaded words ‘price’ and ‘price objections’. It is almost impossible to sell anything without talking about price and dealing with price objections.

Visit any fair or car boot sale and you will hear the question repeated a thousand times “How much? How much for that one? How much for this one?” It is a price reduction technique in itself. Ask the stallholder how much something is three times, look disappointed and the next price that drops out of the stall holder’s mouth will probably be lower.

Much of the guidance about handling price objections is directed at professional sales people. However, as business owners we are not all trained slick sales people and maybe we don’t even want to be. Maybe we just want to be ourselves, sharing with the customer our passion for what we do. We know how much hard work and/or love has gone into the product and we are crushed when somebody raises that horrid word “expensive”. This article follows on from a previous article “Are you too cheap” and will help to give you a new perspective on dealing with and resisting price objections.

The first step is to recognise that not all price objections are from genuine buyers. Some price objections come from people that are not really buyers at all :-

The ‘Short Arms, Long Pockets’ Type

These kinds of people are tight, mean, rarely put their hands in their pockets and if they do, it is because they are cold. They may be poor or well off, but by nature they are tight. Everything is too expensive, no matter what the price. You can recognise them by their apparent ability to totally ignore their wife (or husband) whilst out shopping, suddenly becoming deaf and utterly blind to their other half’s tentative expressions of interest.

Best approach – This type of customer has no intention of buying anything and is not worthy of your attention. By all means, be nice and talk about anything and everything, but not your product. If you get the chance, give your business card directly to the person who is interested, but don’t waste an ounce of your precious sales energy on this type, they are not genuine buyers.

Learn to recognise the different types of Price Objections

The Bargain Hunters.

These are the customers who only buy when they think they have got a bargain . You can recognise them by the way in which they only stop by the discount or sale rail. They appear to be raising price objections, whereas their primary motivation is bargain hunting. Listen for:-

“How much for two?”

“Is there any discount?”

“What’s your best price?”

If the ticket says 50% off, they’re hooked.

Best Approach – This type are not really interested in value except in terms of value for money. So justifying a ‘full’ price in value terms will leave them unimpressed. If you are happy to discount to get the sale, do so, but be very cautious about unplanned heavy discounting as it will play havoc with your margins. A better approach is to offer to add them to a special list of people to contact when you have a sale or special offers; they will love you for it. Bargain hunters can make great fillers for slack times of year, when discounts may be necessary.

Discounting on the back of price objections can play havoc with your profit margins.

The ‘Know it All’

This is the buyer that peers earnestly at you and says something like:-

“Competitor X is selling those at half your price.”

Or, with total conviction, “Oh, no you’re way too expensive.” And the most infuriating of all for a craftsperson “How much? My mate can knock up something like that for a lot less than you’re charging.”

These buyers conduct themselves with absolute confidence. Their entire mission seems to be to disconcert you. Undoubtedly, their price objections will shake your confidence.

Best approach –If you know your competitors’ products and how they compare to yours, you could try a comeback such as “Really? Have you checked if that includes… ?” Otherwise, remember that not everybody who expresses an interest in your products has buying intentions. This type of comment is not really an invitation to negotiate or a genuine price objection and they are very unlikely to be receptive to reasoned arguments about value. If they are buyers at all, which is doubtful, they have already decided to buy elsewhere and are probably not worth engaging with. Smile sweetly and move on, they may come back to you when ‘cheap’ has cost them dear.

The ‘Teaser’

This is a price objection designed to whittle down your price to rock bottom, sometimes below rock bottom. The ‘Teaser’ is recognisable by their calm, friendly approach and absolute determination to pay you less than your product is worth. Teasers have a very specific line on price objections:-

“I’d love to buy from you, but I’ve had a cheaper quote from… “

“I would like to place the business with you. If you can match your competitor’s price…”

At the same time as flattering you and teasing you with the prospect of a sale, they are undermining your price, leaving you fearful that if you do not reduce your price, then they will go and buy somewhere else. Very effective. And absolutely heartless.

Best approach – These people are motivated by knowing that they have got you down to rock bottom price. Whilst they may turn into paying customers, they may be the very worst type of customer to do business with as their price attack leaves you with no margin for error. You may even find that you are effectively paying them for the privilege of supplying them. Resist, resist. (More on this in another blog.)

Although these customer types appear to be raising price objections, in reality, some of them are very unlikely ever to buy from you. It is essential, for your own sanity and bank balance to recognise when a price objection is from a genuine customer and can therefore be dealt with, and by contrast, when it is from a customer who may actually be bad for business.

How to recognise a genuine purchaser.

A genuine customer has questions. Questions about the performance or delivery of the product. Essentially, their questions will focus around whether the product will meet their buying need in its broadest context. Price is only a part of that need. The rest is about satisfaction.

A genuine customer will want to hold, try on, feel and touch the product. If you offer to put a product in a customer’s hands and they refuse, they are not a genuine buyer.

A genuine buyer will be happy to engage with you. They will look you in the eye and talk to you directly. They will wait to ask you a question if you are busy and they will be happy to give you their name and phone number.

A genuine buyer makes YOU feel good. They may raise objections and some of these may be price objections, but fundamentally they LIKE your products and want to buy them.

So when you next hear what appears to be a price objections, consider whether you are actually dealing with a mean ‘Short Arms, Long Pockets’ type, a miserable ‘Know It All’; an insatiable ‘Bargain Hunter’ or a deadly ‘Teasers’ and act accordingly. Most importantly, recognise and treasure your genuine buyers and save your best sales efforts for them. Your sales will soar and so will your confidence.

SkillsforSale would love to hear about your experience of handling price objections or any comments on the above article. Please add your comments to the Comments box below.

A really good post. It’s interesting that how a business sets itself up will often determine the type of buyers that they attract even for goods sold widely. Harrods v Currys for electrical items would be a comparison with different client expectations as an example that I can think of.

Thank you Cherry. This post came at just right the time. When you are a new business (and I mean newly formed and also a new service) there is little to benchmark pricing against. The personas you share are really helpful and I will carry them in mind during our conversations with prospective clients. Reassuring, reaffirming and insightful.